Home sales end 4-month rise

Economists say dip should be temporary

Single-family-home resales dipped unexpectedly last month, falling 2.7 percent from a month earlier, the National Association of Realtors said yesterday, reversing steady monthly gains since April. Most economists, however, called the drop temporary and said they expected sales to strengthen later this fall.

But even if sales do turn upward again, Maki and other economists don't predict prices will follow. Though prices have stabilized this summer, many economists are forecasting a downward turn over the fall and winter and expect prices to finally hit bottom early next year.

Compared with a year ago, home sales are up 3.4 percent, and the inventory of unsold homes has been whittled down to an 8.5-month supply at the current sales pace. That's the lowest level in more than two years.

In San Diego County, the realty group said sales rose 0.9 percent to 2,979 last month, compared with 2,952 in August 2008. San Diego-based MDA DataQuick had reported lower resale counts last, but a bigger year-over-year boost. San Diego's inventories are running at a two- or three-month supply.

The realty group's figures are based on reports from multiple listing services. DataQuick's figures come from records at county recorders' offices.

Fewer foreclosures have been coming on the market in many areas. In San Diego, foreclosures made up 32.2 percent of sales in August, down from a record 55 percent in January, DataQuick said.

First-time buyers purchased almost one in three homes in August. Together with investors snapping up foreclosures, they have provided most of the momentum in the market this year.

“Prices have just gotten so low in some places that investors can't resist,” said Dave Denslow, an economics professor at the University of Florida.

After a long period in which it was clear that housing was headed in one direction — down — some still doubt the market is truly in recovery mode. Optimists say the bottom was reached earlier this year, but pessimists say there are simply too many foreclosed properties that have yet to be dumped on the market.

Nearly 7 million homes are destined for foreclosure, making up a huge “shadow inventory” of homes that haven't gone on the market, according to a report by Laurie Goodman, an analyst with Amherst Securities Group.

“That housing overhang is the single largest impediment to a recovery in the housing market,” Goodman wrote this week.

Nationwide, sales fell to a seasonally adjusted annual rate of 5.1 million in August, from a pace of 5.24 million. That surprised analysts, who had expected sales to rise to an annual pace of 5.35 million, according to Thomson Reuters.

Sales are up nearly 14 percent from their bottom in January, but are still down nearly 30 percent from their peak nearly four years ago.

Nationally, the median sales price was $177,700, down 12.5 percent from the same month last year. Prices were also down 2 percent from a month earlier.

In San Diego, the realty group's median was given as $375,000, 3.1 percent less than August 2008's $387,800. DataQuick said prices were down 7 percent to $357,000, from $376,000.